Tax Relief

What it’s worthwhile to learn about NSW property tax breaks and lease funds

Two new funding programs are available to property investors in NSW.

The NSW government recently announced a property tax break for residential landowners who offer rental discounts to their tenants.

The program follows a similar program that was launched in May 2020 and lasted for a year. The program received over 17,200 applications and has relieved $ 186 million to date.

Both programs also offered tax breaks to commercial tenants who provide rental subsidies to their tenants.

Minister of Finance and Small Business Damien Tudehope said the property tax relief program is demand-driven and there will be no limit on the number of landowners the government can support.

“We’ve heard from landowners that they want to help their tenants, but they also have to pay bills,” Tudehope said.

“Thanks to the financial relief, you can offer rent reductions together with your tenants and reduce part of the cost burden during the restrictions.”

How can landlords qualify for real estate tax relief?

Homeowners applying for the scheme must rent property on their property to a tenant who has lost 25% or more of their household income due to the effects of the COVID-19 pandemic.

The prerequisite is that the rent of the tenants concerned has been reduced for any period between July 1, 2021 and December 31, 2021 without a later repayment being required.

For those who do not qualify for the program, they can apply for an extended payment for their property tax instead.

How can landlords prove their eligibility?

Aside from the standard requirements, landlords must provide evidence that they have granted rental discounts in order to qualify for the program.

When submitting an application, landlords must provide the following information:

  • Copies of rental agreements as proof of rent reduction
  • Rental books
  • Letter from the caretaker

If necessary, apartment owners must also provide evidence of the financial distress of their tenants.

The documents can be a statement by the tenant about his current situation, copies of the written communication between the landlord and tenant and a letter from the property manager.

However, landlords must have their tenants’ permission to pass on their data to the tax office.

Landlords can apply for the scheme here.

Eligible landlords can receive a property tax reduction from their property tax to be paid for 2021. The value of the reduction is either the amount of rent reduction that you have granted your tenant or 100% of the property tax due on the property is rented to this tenant.

The relief is paid to the landlord as a refund if he has already paid his property tax. It can also be used to offset the balance of the property tax payable.

How can landlords claim the rent?

Better Regulation and Innovation Secretary Kevin Anderson said homeowners can choose to apply for property tax relief or a payment of up to $ 3,000 per lease if they agree to lower their tenants’ rent.

“This payment means landlords are less likely to face missing mortgage payments,” said Anderson.

“Additional protection for residential renters means that at this point in time they don’t have to worry about being evicted due to circumstances beyond their control.”

Landlords who have already applied for the tax scheme are not entitled to rent payments.

The rent payments are available to landlords who have reduced the rent of affected tenants from July 14, 2021.

What do landlords have to bring with them in order to be entitled to payment?

In order to receive the rental payments, landlords must submit the following documents:

  • the rental deposit number or the written rental agreement
  • a written agreement to reduce the rent
  • a completed consent of the tenant to pass on their personal contact details
  • the specified account for the payment

What information should landlords ask their tenants?

In the case of the residential lease agreement, landlords are obliged to provide evidence of the financial distress from the tenants.

These can be documents such as pay slips or bank statements with reduced income, letters from the employer with notice of termination or short-time work, evidence of the closure of the company, medical certificates.

Landlords who are eligible for payments can claim up to $ 3,000 per lease.

If you’ve already requested a payment of $ 1,500, which is the program’s original cap, you’ll need to file a second claim for up to $ 1,500 and another completed rental variation agreement.

Landlords can apply for housing benefit here.

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